Obama warns GOP against trying to 'collect a ransom' in debt fight

WASHINGTON -- Painting a grim picture of the economic fallout from such a move, President Obama warned Republicans on Capitol Hill not to use the federal debt limit as leverage to win budget cuts and accused them of threatening to "blow up the economy."

"They can act responsibly and pay America's bills or they can act irresponsibly and put America through another economic crisis," Obama said at a news conference Monday. "But they will not collect a ransom in exchange for not crashing the American economy."

The formal news conference in the East Room, likely the last of Obama's first term, was announced unexpectedly Monday morning and was more evidence of the White House's eagerness to try to capitalize on what it sees as the president's advantage as the next round of budget negotiations begins.

Obama arrived primed with tough talk and dire warnings for Republicans, who are deliberating this week on their strategy in the upcoming fight.

He said another standoff over the federal borrowing limit could send the economy back into a recession and would hurt the nation's international standing. Hoping to reframe the way Americans understand the fight over the statutory borrowing limit, Obama offered an extended metaphor, saying refusing to raise the limit was tantamount to dining and then dashing out on a bill at a restaurant.

"You don't go out to dinner and then, you know, eat all you want and then leave without paying the check. And if you do, you're breaking the law," Obama said. "We are not a deadbeat nation."

Raising the debt limit on the amount the Treasury Department can borrow doesn't appropriate new spending but allows the government to borrow more money to pay its bills. The U.S. hit the current limit of $16.4 trillion on Dec. 31, 2012, but Treasury Secretary Timothy F. Geithner said he can use "extraordinary measures" to delay a default for a couple of months.

That deadline isn't the only one looming. Obama and congressional Republicans are preparing to haggle on a trifecta of fiscal decisions. In addition to the debt limit, a set of deep spending cuts are due to take effect in early March. A few weeks later, the government's authority to spend money will run out, if it is not extended.

House Republicans are due to craft their strategy for the upcoming budget talks at an annual retreat for members this week. They are divided over whether they should repeat their 2011 playbook and threaten to withhold a vote on the debt limit until they win future spending cuts equal to the increase.

House Speaker John A. Boehner (R-Ohio) appeared committed to that approach in his reaction to Obama's remarks.

"The American people do not support raising the debt ceiling without reducing government spending at the same time," Boehner said in a statement.

But in a sign of the difficulty the speaker faces in corralling his Republican majority to prevent a catastrophic debt default, the Ohio Republican also telegraphed the importance of trying to avoid that scenario.

"The consequences of failing to increase the debt ceiling are real, but so too are the consequences of allowing our spending problem to go unresolved,” Boehner said.

Obama floated his preferred solution to the debt-ceiling dilemma -- telling Congress to give him the authority to raise the limit without their approval.

He noted that finding the votes to raise the debt limit is never easy or popular. Obama did not note that, as a senator in 2006, he voted against raising the limit, a decision he has since said was shorts0ighted.

GOP reaction to the president's insistence that Congress must grant him the ability to pay the nation’s bills was swift and dismissive.

Even before the president was finished speaking, the minority leader of the Senate, Mitch McConnell (R-Ky.), was critical of the president's approach.

"The president and his allies need to get serious about spending, and the debt-limit debate is the perfect time for it," McConnell said. "We are hoping for a new seriousness on the part of the president with regard to the single biggest issue confronting the country."